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VeChain [VET]: Everything you need to know about this cryptocurrency

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What is VeChain [VET]?

Conceptualized in 2015, VeChain is a platform that aims to provide blockchain solutions for businesses around the globe. It is powered by the underlying VeChainThor which is its public blockchain.

It was founded by VeChain Sunny Lu, who also happens to be the former CIO of Louis Vuitton China. Blending his expertise in luxury goods with the burgeoning blockchain technology, Lu went on to create an IoT [Internet of Things] application exclusively for supply chain management. Today, he serves as the Chief Executive Officer of VeChain via a non-profit which is known as the VeChain Foundation which was founded in Singapore

VeChain is essentially designed to cater enterprise-level businesses by merging physical tracking via blockchain records to watch over real-world products from production to delivery, meaning a solution for streamlining the entire supply chain management process without compromising security and transparency.

The main objective behind the inception of VeChain is to monitor vast amounts of data for businesses in the form of quality, authenticity, storage temperature, and transportation status  through the use of distributed ledger technology [DLT]. This way, the software helps in preventing frauds and knock-offs.

It is important to note that after six years since its inception, VeChain has emerged as one of the most prominent blockchain-powered platforms that is being used by both small and big businesses alike. The strategy that the developers of VeChain adopted was to integrate best features from both the decentralized finance [DeFi] and centralized finance [CeFi] spaces and create a balanced ecosystem that is efficient and trustless.

Originally built on the Ethereum blockchain, VeChain previously used the native VEN token. Two year after it was established, the genesis block was mined on the VeChainThor blockchain. Since then, VeChain has undergone noteworthy transitions. In line with this, previous ERC-20 VEN tokens were swapped at a 1:100 ratio to VET tokens.

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How Does VeChain Work?

  • Proof of Authority: The VeChainThor blockchain leverages Proof of Authority [PoA], a proprietary consensus mechanism. Under the PoA, the network distributes power to validator nodes in the VeChainThor blockchain for confirming transactions. This eliminates efficiency concerns associated with Proof of Work [PoW] and Proof of Stake [PoS] systems while consuming significantly less energy.
  • Governance: VeChain’s goal is not to maintain decentralization despite being based on blockchain. Instead, the ecosystem aims to strike a perfect balance between centralized and decentralized systems to eliminate the shortcomings of a 100% ideal structure. Taking this into account, the votes in the VeChain platform are disbursed on the basis of the amount of VET token a user holds. Furthermore, users that own more than one million VET tokens are responsible for 20% of the vote. In addition to that, verified users, i.e., users with know-your customer [KYC] credential, with one million VET tokens get 30% of the vote. The remainder is divided between the VeChain community. In total, there are 101 master nodes that are in charge of reaching consensus on transactions on the blockchain.
  • Economic model: VeChain possesses Ethereum-inspired dual token strategy. In this system, one token is tasked with public investment and/or digital cash while the other is used for the purpose of smart contract execution. One of the main advantages of this type of blockchain system is that it fosters efficient community-driven governance while maintaining a predictable economic model.

VET and VTHO The Tokens of VeChain

VeChain boasts two native digital tokens – VET coin, and VTHO. They are two separate entities with different use cases.

  • VET: Also known as VeChain Token, VET is used to carry out financial transactions on the VeChainThor blockchain. Users can also invest this digital asset on an exchange. In addition, VET can also be used to pay for transactions on decentralized applications [DApps] that operate on top of the VeChain blockchain. The total amount of supply is set to 86,712,634,466 VET.
  • VTHO: Called the “energy token,” VTHO functions similarly to gas that drives smart contract transactions. Unlike VET, VTHO tokens are, however, not publicly available. Instead, only developers use these tokens. VTHO is used to bear the computational gas expenditure for all transactions on the VeChainThor blockchain. The cost varies on the basis of the data and size of the transaction being processed.

Is VET a good investment?

VET is one of the top crypto-assets on the leaderboard. The users of the VeChain platform can also stake their VET token to pocket some passive income. For this, the token holders are required to hold their VET in a network wallet that remains online for a certain period of time. The longer a user stakes their VET token, the more they earn. Moreover it has a specific amount of supply, thanks to this cap, the demand of the token is expected to rise as the supply declines. However, cryptocurrencies are volatile in nature and it is always advised to do proper research before investing.

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About VeChain Foundation

VeChain Foundation was launched in the year 2017, right after the release of VeChain. It is essentially a non-profit organization that is created for the purpose of research and development of the VeChain ecosystem. The members of the foundation are tasked with decision-making process and governance of the VeChain ecosystem.

In addition to that, the VeChain Foundation holds a considerable reserve of VeChain [VET] tokens in an effort to support and foster the growth within the ecosystem.

Conclusion

VeChain has emerged as one of the powerful blockchain-based service tools that has been applied in businesses across various sectors. From healthcare, to carbon emission monitoring, and tracking quality assurance in the food safety industry, to providing anti-counterfeiting solutions, VeChain boasts a solid track record of efficiency. Over the last few years, it has forged significant partnerships with influential players to disrupt the traditional inefficient pillars and bring in modern, ground-breaking technology.

Its strong presence is not only felt in the Chinese market, but is also slowly expanding across other parts of the world as well.

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